Place the bacon into a cold Dutch oven and set over medium heat. Cook slowly until the fat renders and the bacon is cooked. Remove the bacon and set aside.
Season the beef with salt and pepper. Working in batches, sear the beef in the rendered bacon fat until well browned on all sides. Remove and set aside.
In the same pot, add the diced onion and cook over medium heat until softened and slightly browned.
Add the mushrooms and season lightly with salt. Cook until they release their moisture and it evaporates.
Add the garlic and cook briefly until fragrant.
Pour in the red wine and stir, scraping the bottom of the pot to loosen any browned bits. Add the beef stock, parsley, thyme, and bay leaves, then stir.
Return the beef and along with the cooked bacon.
Add enough water to just cover the beef. Bring to a boil, then cover with a lid, reduce the heat to low, and simmer for 90 minutes, stirring occasionally.
Once the beef is fork-tender, remove the thyme, parsley, and bay leaves. Taste and adjust seasoning with salt and pepper. Serve hot.